New Delhi: Samsung opened the world's largest smartphone factory in India on Monday, a move Prime Minister Narendra Modi said would help transform Asia's third-largest economy into a global manufacturing hub.
Modi and South Korean President Moon Jae-in inaugurated the giant assembling plant - an expansion of an existing Samsung facility - in the city of Noida on the outskirts of New Delhi.
"The Noida plant has now become Samsung's largest smartphone manufacturing unit," Moon said, as the company announced that it planned to eventually manufacture 120 million smartphones a year at the factory.
The decision by Samsung comes at a critical time for the South Korean electronics giant, which is facing a tough battle from Chinese competitors for the control of India's massive smartphone market.
The factory will allow Samsung to make phones at a lower cost due to its scale at a time when other phone making hubs such as China are getting more expensive, analysts tracking the sector said.
It will also help Samsung to compete more effectively with rivals such as China's Xiaomi, which became India's biggest smartphone brand by shipments earlier this year.
"This 50 billion-rupee investment will not only strengthen Samsung's business ties in India, it will also play a key role in India-Korea relations," Modi said in a speech in Hindi at the inauguration of the plant.
Samsung said last year it would spend 49.2 billion rupees ($716.57 million) over three years to expand capacity at its Noida plant.
It is also a shot in the arm for Modi's flagship "Make in India" campaign which is trying to attract foreign investment and drum up much-needed jobs in manufacturing.
Modi said the new factory would generate jobs in Uttar Pradesh, an impoverished state of roughly 220 million where his Bharatiya Janata Party won a crucial election last year.
"This is an important step towards making India a manufacturing hub," the prime minister said.
"It is a matter of pride for India and Uttar Pradesh."
Samsung, which has been assembling phones in India since 2007, also plans to export India-made handsets.
"We 'Make in India', 'Make for India' and now, we will 'Make for the World'," H C Hong, chief executive officer at Samsung India said in a statement.
More than 120 local factories currently assemble mobile phones and accessories like chargers, batteries, powerbanks and earphones in India, according to tech research firm Counterpoint.
"It's a move that'll obviously play well for Samsung but it also gives a much-needed shot in the arm to India's mobile manufacturing ecosystem as it will push rivals to consider expanding local production," said Navkendar Singh, an associate research director at International Data Corporation.
President Moon will be formally received by India's President Ram Nath Kovind on Tuesday before holding talks with Modi in the Indian capital.